Cyber crime continues to escalate with new threats arising daily. The encryption security flaw named Heartbleed is now considered one of the biggest vulnerability threats the Internet has ever seen. It refers to a long-standing vulnerability in the servers and browsers that rely on Secure Sockets Layer (SSL) protocol to encrypt private data transfers over the public Internet.
What is critical for industry executives to understand is that these risks are is not confined to large companies and popular websites like Target, Facebook, Pinterest, Tumbler, Google, Gmail and Yahoo. The Ponemon Institute’s “2014 Cost of Data Breach Study: United States” found a company with fewer than 10,000 records is more likely to be hacked than a firm with more than 100,000 records, in part because smaller firms are less likely to have robust defenses against hackers, who are not discriminating in what they attack. And the cost of these breaches can be severe.
Use of New Technology Increasing Exposure
If you look at The Bullhorn.com 2013 Staffing Industry Trends Report, you’ll find a number of trends that are increasing exposure to these cyber risks:
- 98 percent of staffing industry providers access social media through a web browser to search and retain personal information on placement candidates.
- The industry is expanding the use of cloud-based technology to process and store the millions of protected company and candidate records generated in workforce intermediation process.
- 47.9 percent plan to expand into new geographic areas with help using mobile recruiting software SaaS. New branches and new states equal new risks.
- Industry consolidation is increasing through mergers and acquisitions, requiring the transfer of protected records.
- Provider employees, contractors, and candidates are increasingly migrating to out of office use of personal mobile devices. See: Snelling Staffing Acknowledges Data Breach
- High growth industry sectors such as IT, accounting and banking, engineering, and healthcare are among the most breached industries. See: Hackers are coming after your medical records
It is clear from these trends that the servers and browsers used in staffing activities are all at increasing risk. Heartbleed attacks are everywhere and leave no indication a breach has taken place. If found and patched, another could easily be transferred again if your candidates and clients have been affected and they haven’t patched their breach and changed their passwords. It is also clear that the increased use of a “bring you own device” (BYOD) policy creates additional threats that can’t completely control. See Fortinet article, Generation Y’s Hardening Stance Against Corporate BYOD.
Prevention programs only minimize risk! Cyber crime is a threat to all companies, regardless of policies and security programs. Therefore, it’s critical for your executive team to recognize that it’s not just a technology issue, it requires protective measures in training employees, clients and candidates. A “Breach Response Plan” in place prior to a breach will also limit exposure, but not eliminate it.
Transfer your risk. A recent PwC survey found that in spite of increasing focus on the challenge, the vast majority of cyber-security programs fell far short of guidelines drafted by the Commerce Department’s National Institute of Standards and Technology (NIST). Only 28 percent of more than 500 executives surveyed said their company had a CISO or Chief Security Officer.
Even with the best controls, staffing companies can’t always prevent a breach from occurring; Cyber Insurance allows you to transfer some of the risk. Assessing your company’s current condition is part of the application process.
PREMIUM CONTENT: Background Checks: Managing Liability in the U.S.
Policy coverage can include:
- Notification to all individuals whose private information may have been lost, stolen or accessed without proper authorization (notification is required in most states)
- Associated costs for those individuals electing credit monitoring in the event their information was lost, stolen or accessed without proper authorization
- Third Party financial claims and legal costs in the event of a suit and defense and penalty costs in the event of a regulatory claim (data breaches may be subject to state and federal penalties)
- Public relation expenses to protect and restore a company or organization’s brand and public image.
- Expenses to retain a data forensics expert to determine why the breach occurred and how to avoid one in the future
There is no doubt that the risk of cyber crime is high and growing. It is also clear that even the largest industry providers are finding it difficult to meet this growing challenge. For most, appropriate insurance coverage should be a part of the solution. Most carriers offer Cyber Insurance, but coverage will vary, so do your homework!
This post was co-written by Wil Beach.
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